“Turnbull's NBN in crisis”, blared the front-page headline in the February 29 issue of The Sydney Morning Herald. "Malcolm Turnbull's cut-price National Broadband Network is facing mounting delays and rising costs, according to a damning internal report obtained by Fairfax Media," the article said.
Fairfax revealed that the report, labelled “commercial in confidence” and “for official use only”, details a litany of problems in delivering the Coalition's supposedly more budget-friendly fibre-to-the-node (FTTN) model.
The report said the company's own assessment had found the project has fallen two-thirds short of its benchmark construction timetable and connection costs to each house or business are blowing out.
The model had been marketed to voters as superior to Labor's fibre-to-the-premises (FTTP) NBN because it was “Fast. Affordable. Sooner”. Now it appears to be slow, expensive and delayed.
The internal report, which was never intended to be disclosed publicly, candidly reveals how the nearly $50 billion project drifted off course when Turnbull was in direct control as communications minister, before he replaced Tony Abbott as Prime Minister in September.
The report said there had been a "critical bottleneck" in the preliminary design phase. As of February 12, final designs were more than 740,000 premises behind target. Completed construction was 65,000 premises behind.
Labor's communications spokesperson Jason Clare told the ABC on February 29 this was happening because “Malcolm Turnbull thought it would be a good idea to go from building a fibre network that you can get in Singapore, in Japan, in New Zealand, right across many parts of the world, to building a second rate copper network".
Fairfax further revealed on March 3 that NBN Co has been secretly trialling a new, low-cost fibre-to-the-premises technology that would be dramatically cheaper and easier to deploy than its current model. The new set of leaked documents has been kept secret as the government desperately tries to defend its FTTN model, which relies principally on outdated Telstra copper phone connections for the final link from the neighbourhood cabinet — or "node" — to the premises.
The new fibre technology was tested at two sites in Victoria for 18 months from July 2014. The new system could halve construction costs from $1200 to $600 per-premises.
This latest revelation has been described by Labor as an "extraordinary leak", which shows that the Turnbull government is deliberately overstating the costs of the full-fibre option. It shows that while the costs of the government's FTTN model are blowing out massively, the costs of the fibre-to-the-premises (FTTP) system are coming down.
This comes on top of the latest report from the Telecomunications Industry Ombudsman of a huge rise in the number of public complaints about NBN services. In the final quarter of 2015, there was a 48% rise in complaints about unusable NBN landlines and a 42% rise in complaints about unusable NBN internet services, compared to the previous quarter.
All this is having an effect inside the company. Paddy Manning on the ABC's Drum on-line on March 2 said: "NBN Co is leaking and, if what I'm hearing from former staff is right, morale inside the organisation is abysmal, management is hostage to every expensive consultancy in town, and senior staff are leaving, disillusioned, as what they thought was a nation-building project is turning into a politicised quagmire. One former employee told me: 'I'll be amazed if it ever gets built'.”
The final, and most critical, aspect of the NBN mess is that the corporate sharks are beginning to circle for the eventual privatisation of this gigantic project — the largest public telecommunications infrastructure operation in Australia's history.
A recent report by Infrastructure Australia (IA) advised the Turnbull government to split up the NBN and start preparing to sell it off to private companies. The IA report, which represents a 15-year corporate plan for the country's infrastructure needs, says the NBN should be privatised in the "medium term".
The report said: "In the near term, the Australian government should commission a scoping study to assess the most appropriate approach, structure and timing to deliver a privatised NBN model.
"It may be desirable to defer the privatisation of NBN Co until the roll-out is complete, both to avoid disrupting a complicated infrastructure project and in recognition that private investors are likely to have less appetite for risk during the roll-out phase.”
Peter Boyle, Socialist Alliance candidate for the seat of Sydney in the upcoming federal election, said on March 3: "In other words, Infrastructure Australia is saying the government should spend $50 billion of taxpayers' money on building the National Broadband Network, foisting all the risks and likely cost blow-outs onto the public purse, and then flog the whole project off to big business, allowing them to make all the profits.
"This threat to sell off the NBN to private industry is highway robbery of the community on a massive scale. This plan is the height of neoliberal madness.
"It comes on top of the Coalition government's huge scam in implementing an obsolete copper-based system for the NBN, which will leave Australian telecommunications users stuck with 20th century technology in a 21st century world.
"Socialist Alliance stands for a high-tech, fibre-to-the-premises NBN, kept fully in public hands. We challenge the ALP to pledge to maintain public ownership of the NBN, despite previously leaving open the privatisation option.
"We commit to fight any moves to sell off the NBN, or any other public telecommunications assets, and to take back into public hands the entire large-scale telco industry, including the previously privatised Telstra, and use these vital facilities for the public good.
"SA stands for workers' and community control of the telecommunications monopolies, and the use of any profits for public services and environmental sustainability."